Why do people buy flats on loan and enter into debt trap for their lifetime?
Because we live in India.
And, We have more faith in family, values, relations than anything else. And we are emotional too 🙂
While taking decisions about purchasing a house we do not think of ourselves but we think of our kids.
We are not buying a house for ourselves but for the comfort of our children and coming generations.
Owning a house, a car, having kids etc. are the most powerful emotions; which easily supersedes all other financial calculations.
Buying an asset that stays with us 24*7 gives us (Indians) most satisfaction and happiness than the units of Mutual Funds lying in the Demat account.
Buying an asset for a lifetime and for the next 7 generations matters for us more than an investment with good ROI options.
Decorating our own house during Diwali with family & relatives gives us immense happiness and satisfaction.
But You can only know the true feeling of it; satisfaction and PRIDE once that debt is over.
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There is a 22 year ‘Rohan’ who is from a middle class family (obviously). He has a dream to have a house which he can call home.
Rohan starts his job career at the age of 22 at a good MNC. He is estactic that he can now stand on his own two feet.
After a year, he is happy with his job and thinks he can buy a house by giving a down payment.
He is overwhelmed by the fact that he, at the age of just 23, has bought a house which he can call ‘home’.
He takes a 20 year emi home loan. (Emotionally)